Venezuela telecommunications

Movilnet to build base stations to roll out 4G in Venezuela

On September 22nd Movilnet, a Venezuelan telecoms firm, said that it would set up 360 long-term evolution (LTE) base stations by December to roll out 4G services in the country.

Analysis

The announcement comes after Movilnet, the subsidiary of state-owned CANTV, declared two years ago that it would invest US$154.6m in 2015 to deploy its 4G LTE network. Movilnet's decision to roll out base stations was made during a breakfast television programme by the president of the state-owned operator.

Movilnet is the largest telecoms firm by market share in Venezuela, but it has lagged its rivals, Movistar Mobile and Digitel, in rolling out 4G LTE services in the country. Digitel launched its services in 2013, followed by Movistar Mobile - a subsidiary of Spain's Telefonica SA - in 2015.

Mobile penetration rates in the country have fallen in the past few years, as an ongoing economic crisis forced some consumers to cancel their contracts. Tariffs for mobile services are regulated by the government, which wants to keep prices for these services low amid high inflation. In June 2015 Venezuela's president, Nicolas Maduro, barred mobile operators from implementing sharp increases in their call and data tariffs.

Movilnet has gained subscribers since the nationalisation of CANTV, with the company seeking to boost its penetration by offering low tariffs, discounts and low-cost phones. The Venezuelan telecoms ministry signed a memorandum of understanding with US-based Verizon Communications Inc in 2007 to buy a 28.5% stake in CANTV. The government then picked up a majority stake in the company via a public tender offer.